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News & Tax Alerts: Tax Alerts – State

URGENT: Contact Your Legislators Regarding Proposed Tax Bills

Tuesday, May 26, 2015  
Posted by: Ann Lupo

URGENT ACTION NEEDED:
Contact Your Legislators Regarding Proposed Tax Bills


As a follow up to our May 14 Tax Alert regarding problematic effective date language that is pervasive in tax bills moving through the legislature this session, we are urging you to contact your legislators to make them aware of the problems associated with the bills. Specifically, for example, the wording in HB 624:


"The provisions of this Act shall apply to all exclusions from taxable income and all claims for deductions made on any return filed on or after July 1, 2015, regardless of the taxable year to which the return relates.”

This verbiage can be found in several bills including, but not limited to HB 218, HB 402, HB 629, HB 805 and HCR 8, that are soon to be heard in the Senate Finance Committee. These bills, with fiscal notes that comprise the lion share of the revenue raising measures, are necessary to establish a balanced budget under the currently proposed plan.

LCPA’s State Government Relations team has provided information to the media, plans to provide testimony at the Senate Finance Committee meeting later this week and continues to lobby against the wording in the suspect bills.

Several of you have already contacted your legislators to create awareness of the issue and we are grateful for your efforts. We are asking ALL LCPA MEMBERS to reach out to your legislators, voice the profession's concerns, and educate our elected officials on the far-reaching negative impacts, not just to the CPA profession, but to the taxpayers of our state should passage of the bills occur as they are currently drafted. [DOWNLOAD A TEMPLATE LETTER]

Act now!

As a profession, we have typically not gotten involved in debate about specific tax positions. We do get passionately involved in tax policy matters. Passage of these bills is BAD TAX POLICY. To help you in your communication with your legislators, here are some talking points:

  • How can two taxpayers with identical taxable incomes have different tax liabilities simply based on when they file their return?
  • Extensions are granted to extend the filing of a tax return. Payment of the tax is not extended. If the tax law is subject to interim change as proposed, no one will file extensions in the future, which will create workload compression by forcing all returns to be filed by the original due date.
  • Taxpayers will lose faith in the system. Economic development will suffer.
  • Taxpayers that have a significant 2014 tax liability will probably file their returns on or before June 30, 2015. If the 2015/16 fiscal notes associated with these bills contain an estimate of 2014 taxes that are uncollected as of June 30th, then the fiscal notes aren't reliable.
  • What about amended returns from prior tax years? Strict interpretation of the proposed bills would suggest that amended returns from tax years 2012 or 2013 would be subject to the new laws and calculated accordingly.
  • The tax software companies won't be able to timely reprogram their products to account for the change in the tax law. So technically, every return filed after June 30th will be wrong.
  • The Department of Revenue doesn't have enough staff to manage what purports to be a very manual process to recalculate EVERY return that is filed after June 30th and send out a new tax bill.
  • The legal implications are daunting.

Find Your LegislatorsUpdates on Proposed Legislation

Thank you for your help in educating our legislators and for the valuable relationships you regularly forge with community leaders. Please let me know if you have further questions, comments, or concerns.

Ron Gitz, CPA, CGMA
LCPA Executive Director

 

Questions about the content of this Alert or about our legislative outreach can be directed to Linda Babin.


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